Ninety One UK Special Situations I Acc
Why is this fund on our radar?
Ninety One UK Special Situations aims to grow investors’ capital by backing unloved UK companies that the manager believes are undervalued and temporarily mispriced. Managed by experienced contrarian investor Alessandro Dicorrado, who worked alongside long-time lead manager Alastair Mundy before taking over in 2020, the fund seeks to exploit behavioural biases in markets by investing where investor sentiment is overly pessimistic.
The manager focusses on two complementary sources of opportunity in the UK: well established, profitable businesses that come with durable competitive advantages and high returns on capital that can compound cashflows over time; and ‘value’ opportunities where share prices have fallen too far, despite a healthy underlying business. Alessandro and his team are careful to make the distinction here between structurally challenged firms and those which are simply overlooked.
This approach has delivered strong and resilient results. The fund hasn’t just grown in value, it has consistently done better than the wider market outperforming in a higher percentage of periods, whilst avoiding many of the bigger missteps that hurt others. Importantly, this has been achieved this without taking excessive risks, with the fund holding up better than many peers when markets have been more challenging. This balance of long-term growth potential, disciplined risk mindset and a selective, actively managed portfolio is why it stands out in our analysis. For investors, it offers a contrarian and quality-driven way to access the UK market beyond the usual names.
Skip to Our VerdictPerformance
Under Alessandro Dicorrado, who became lead manager in April 2020, the fund has delivered exceptional results. Since then, it has returned 197.8%, notably ahead of the FTSE All-Share Index’s return of 102.3% (represented below by an ETF tracking the index) and also the average fund in its peer group*. Over five years, the fund has gained 190.9%, almost double the FTSE All-Share and nearly triple the peer group average.
performance under current manager
Past performance is not a reliable indicator of future results
The journey, however, hasn’t been straight-line. In 2020 and 2021, technology and digital-first businesses surged as life moved online during the pandemic, a backdrop that naturally favoured smaller, and more nimble growing businesses over more well established companies of the type favoured by the strategy meaning the fund struggled to keep up. With exposure across the market-cap spectrum, including more economically sensitive domestic UK mid-caps, it also felt the impact of economic pressures which hindered returns.
What’s most compelling is the picture in 2022. That year, value stocks strongly outperformed growth as inflation soared and interest rates jumped. A value-tilted fund might have been expected to outperform, yet this fund lagged. The reason lies in `the manager’s distinct approach. Whilst Alessandro is a value investor, he does not simply buy the typical value-heavy sectors like banks, energy or miners. In fact, the fund is meaningfully underweight in these areas. Instead, he looks for value in many forms, from those quality businesses having temporary setbacks and those the managers define as “fallen angels or cyclical leaders” that are undergoing a change in management or company transformation. As a result, the portfolio behaves very differently to traditional value strategies, giving investors a broader, more nuanced way to access recovery and value opportunities in the UK. This helps explain why it did not mirror the ‘traditional value rally’ in 2022.
Calendar year returns
Past performance is not a reliable indicator of future results
Since then, with less reliance on broad style factors driving returns and more focus on company-specific factors, the strategy’s distinctiveness has really come through. Alessandro has focussed on building a concentrated portfolio of around 30–35 companies where valuation, quality and recovery potential align, allowing shrewd stock selection to be the primary driver of returns. Over the 12 months to October 2025, the fund has gained 31.1%, significantly ahead of both the ETF tracking the FTSE All-Share’s 22.2% return and comfortably above the average return of 15.3% from funds in its peer group. Successes such as Rolls-Royce, Dowlais and Melrose, each a recovery or transformation story, illustrate how the strategy aims to outperform when individual company turnarounds take shape.
Portfolio
The fund’s process is grounded in capturing mispriced opportunities created by market overreaction. The team begins with a proprietary screen to identify UK companies whose share prices have fallen sharply from previous highs. From there, they carry out deep fundamental research, evaluating the company’s financial strength, assessing its balance sheet and ability to generate cash, alongside its competitive position in the market, all to distinguish genuine structural decline from temporary setbacks.
Importantly, the approach is not just focused on identifying ‘cheap’ stocks, as it also emphasises identifying companies which the manager believes hold a good track record when it comes to managing and investing in their own business.. The managers are alsop careful to ensure that the portfolio remains diversified across different drivers of recovery, rather than reliant on a specific sector bet.
This philosophy results in a high-conviction portfolio of around 33 holdings, with sector exposures driven by opportunity rather than trying to match the index. The fund is heavy on consumer discretionary businesses (making things people use, but don’t need) and industrials (manufacturers), where the team sees potential for recovery and operational improvement, including names such as Rolls-Royce, Melrose and DCC. Conversely, it remains lighter on to traditional ‘value’ sectors, like financials and energy, as highlighted by the relative figures in the chart below, where the manager argues fewer companies meet his criteria.
Regional allocation
Although companies do not need to pay a dividend to qualify for inclusion in the portfolio, the managers’ focus on cash-generative, fundamentally improving businesses often leads them to companies capable of paying attractive dividends and growing those payments over time. As a result, the fund typically offers a blend of companies which already pay solid dividends and those with strong dividend growth potential. Today, the portfolio carries a modest historic yield of around 1.8%, but the income it generates has been increasing, annual dividends rising in four out of the last five years.
Our Verdict
After years of being overlooked, the UK market now presents one of the most compelling valuation opportunities globally, with a wide range of businesses, from domestic businesses to global franchises, trading at prices which are low relative to both their own valuation histories and in comparison to overseas peers, despite improving fundamentals.
We think this fund offers an effective way to access this opportunity, but importantly, in a more selective and thoughtful way than simply buying the index. With a constant eye on valuations, Alessandro’s approach looks beyond sector labels and index weights, searching across the market for companies where sentiment and price have diverged from long-term fundamentals. That philosophy, combined with disciplined risk management, has helped deliver strong long-term results through different environments. For investors seeking active exposure to the UK’s recovery story that an ETF simply tracking the market cannot match, this fund stands out as a compelling option, in our view.
Key Risks
- Focus on cheap ‘value’ opportunities is likely to lag in a market where investors are pursuing future earnings from ‘growth’ companies
- Concentrated, high-conviction portfolio can add risk
- Low dividend yield compared to the market so might not appeal for high-income seeking investors
